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First Cut: Initial claims levels drop in December 14 week as first wave of year-end layoffs abates

Initial jobless claims for the week ended December 14 fell 18,000 to 234,000 after an unrevised 252,000 in the prior week when the data surprised with a jump higher of 49,000. The number of unadjusted claims fell 48,412 to 269,461 in the December 14 week. The number is an echo of the noise in moves that are not in alignment with the seasonal adjustment factors this year.

 

The Labor Department cited no special factors and no states estimated claims in the week.

Last week about half of the over 100,000 unadjusted initial claims were in six states – California (+11,977), New York (+10,875), Texas (+10,290), Pennsylvania (+8,078), Georgia (+5,631), and Illinois (+4,565). These are among the 10 states with the largest share of the labor force. Comments for the December 7 week suggest that much was the usual sort of slowdown in activity at the start of the colder months. However, these also suggest that manufacturing was a factor as well. It was probably a consequence of the recession in the factory sector that lead to some earlier than usual layoffs. I would expect the bulk of the layoff activity is now out of the way, at least until the usual round for retail and wholesalers in January after the end of the holiday shopping period. However, the claims numbers are likely to remain noisy for a while.

Continuing claims rose 51,000 to 1.722 million in the December 7 week as the wave of claims filed in the November 30 moved on to the approved rolls for benefits. The insured rate of unemployment remained at 1.2% in the December 7 week, another in a long horizon at that rate with only rare variation by a tenth to the downside.

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